The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, tabled the 2020 Fall Economic Statement (FES) on November 30, 2020. The statement, entitled Supporting Canadians and Fighting COVID-19: Fall Economic Statement 2020, represents the government’s first budget-like plan since the last full budget in March 2019. As expected, FES 2020 highlights the heavy economic impact of COVID-19 on the Canadian economy, with a forecasted federal deficit of over $380 billion for the 2020-2021 fiscal year.
The FES was a mix of specific commitments as well as priorities of the government which will be further articulated through future anouncements or the spring budget. As anticipated, there were substantial spending commitments aimed at getting Canada through the pandemic, and subsequently pursuing aggressive economic recovery through stimulus spending.
Highlights of the Fall Economic Statement include:
- A short-term stimulus package is valued at $70 billion to $100 billion over roughly three years. The government says the stimulus spending — intended to build a greener, more inclusive, more innovative and competitive economy — will launch after a vaccine is distributed and life begins to return to normal.
- Increasing the maximum rate of the Canada Emergency Wage Subsidy to 75 per cent for the period beginning December 20, 2020 and extending this rate until March 13, 2021, and extending the current rates of the Canada Emergency Rent Subsidy and Lockdown Support until March 13, 2021. Both programs will be there for businesses until June 2021.
- A new Highly Affected Sectors Credit Availability Program to support Canada’s hardest-hit industries, like tourism, hotels, arts and culture, and the air sector.
- Laying the groundwork for a Canada-wide Early Learning and Child Care System.
- A $1-billion fund to help provinces and territories improve COVID-19 infection control in long-term care facilities.
- a temporary support in 2021 of up to $1,200 for each child under six for low and middle-income families eligible for the Canada child benefit (CCB).
The government projects the deficit will reach $381.6 billion by the end of March 2021 and could climb even higher, depending on factors such as the severity of shutdowns and the rate of COVID-19 infections.
For more coverage of the Fall Economic Statement, take a look at the following:
Fall Economic Statement 2020: Let the Questions Begin – Policy Magazine
To discuss any of these matters, feel free to contact:
Adam De Caire
Director, Public Affairs